♦A medical marijuana dispensary registered with ADHS must be operated on a not-for-profit basis, but will be able to receive payment for expenses incurred in its operation.

♦The Department can issue no more than one nonprofit medical marijuana dispensary registration certificate for every ten pharmacy permits issued by the Arizona State Board of Pharmacy under current law.

♦A dispensary can cultivate marijuana only in an enclosed, locked facility.

♦A dispensary can acquire marijuana from other registered nonprofit dispensaries or from a registered qualifying patient or designated caregiver if the patient or caregiver is not compensated for the marijuana.

Governer Brewer has filed a declatory judgement suit in federal court asking for the courts to clarify whether the Arizona Medical Marijuana Act is legal. It is anticipated that the federal court will abstain from hearing the case as they have done in similar circustances in other states. It is also anticipated that the program will be moving forward again very shortly after the federal court has reviewed the filing, which could be any day.

3: Who can open a dispensary?

Only an individual who is at least 21 years of age and has been a resident of Arizona for at least three consecutive years before the date of application may be a principal officer or board member on an application for a dispensary registration certificate. In addition, each principal officer and board member must also pass a criminal records check for an excluded felony offense. There are other conditions that may affect the ability to obtain a dispensary registration certificate.

4: When will you award the dispensary certificates?

ADHS anticipates the allocation process for initial dispensary certificates to be completed in August 2011.

5: On what basis will dispensary registration certificates be awarded?

The Department will issue dispensary registration certificates using an evaluation process. If only one complete application is received for a dispensary in a particular CHAA, that applicant will be awarded a dispensary registration certificate. If more than one complete application is received for a dispensary in a particular CHAA, the Department will use the evaluation process to allocate the dispensary registration certificate.

6: Once I apply for a dispensary certificate, can I change the address in my application before I begin operating?

Yes, as long as the new address complies with local zoning, is in the same CHAA, and you pay the fee.

7: Can I apply for a dispensary at the same address as another applicant or when there is another application in close proximity?

State law requires a dispensary and a dispensary’s cultivation site to be at least 500 feet away from an existing public or private school. All other zoning requirements are made at the local level. An applicant must attest to meeting local zoning regulations and provide proof in the initial application. ADHS does not have the authority to prevent a building owner from offering conditional leases to multiple applicants. If you are unsure how your local jurisdiction’s zoning and use requirements apply to you, consult an attorney.

8: Is my $5,000 application fee refundable?

If a dispensary registration certificate application is complete and the applicant is not allocated a dispensary registration certificate, the applicant will be refunded $1,000 of the $5,000 application fee. The application fee is not refundable in other circumstances, including an applicant withdrawing the application.

9: What if my application is incomplete because I forgot to fill out or submit something, is the application fee refundable then?

If an application for a dispensary registration certificate is incomplete, an applicant will be sent a Notice of Deficiency and will have 10 days to submit the missing items. The application is considered withdrawn if the application remains incomplete after 10 days and the fee is not refundable.

10: Can I withdraw my application and get my $5,000 back?

The fee is not refundable if an application is withdrawn.

11: To apply for a dispensary registration certificate, do I have to prove it is okay to have a dispensary at the address?

An applicant must either prove they own the land/building or that the landlord approves the use of the property for a medical marijuana dispensary. Applicants must also prove the address meets zoning codes (see next question).

12: Do I need a certificate of occupancy from my city in order to apply?

No, applicants do not need to submit a certificate of occupancy in the initial application. They must attest to meeting zoning requirements and provide documentation from the local government saying either there are no local zoning requirements or the location meets the requirements. However, if chosen as the dispensary for a specific CHAA, a copy of a certificate of occupancy or other documentation issued by the local jurisdiction will be necessary when requesting approval to operate the dispensary.

13: When do I need to get a special use permit?

As part of the application to ADHS requesting approval to operate the dispensary, a dispensary must submit a copy of a certificate of occupancy, special use permit, or other documentation issued by the local jurisdiction authorizing the dispensary to occupy and use the building as a dispensary. Therefore, if required by the local jurisdiction, a special use permit must be obtained before a dispensary submits an application to the Department for approval to
operate.

14: How many dispensary registration certificates will one entity be able to obtain?

A person may be an applicant, principal officer, or board member on only one dispensary registration certificate application for a location in a single CHAA and on no more than five dispensary registration certificate applications for locations in different CHAAs. An applicant must be prepared to operate every dispensary applied for.

For the initial issuance of dispensary registration certificates, the Department plans to allocate certificates on the basis of Community Health Analysis Areas (CHAAs).

17: What is a CHAA and why is the Department using them to allocate dispensaries?

CHAA stands for Community Health Analysis Area, a geographic area based on population established by the Department for use by public health programs. By requiring dispensaries to apply for a dispensary registration certificate based on a CHAA, the Department is trying to spread dispensaries across the State, based on population.

18: What does the dispensary application ask me to confirm?

In the dispensary application, applicants must confirm whether: they have been a resident of Arizona for 3 years; they are delinquent on federal, state and local taxes, child support, or student loans etc.; they have ever filed for personal bankruptcy; they have ever been a principal officer of a business entity that filed for bankruptcy; everyone with a 20% or greater financial interest in the dispensary is an applicant or board member; and they have access to $150K in startup capital.

19: How will the answers I provide on my dispensary application affect the evaluation process?

All principal officers, board members and dispensary applicants must have lived in Arizona for the preceding three years before application. According to the rules, an applicant who is delinquent on federal, state, or local taxes, child support, or student loans, has an unpaid judgment due to a governmental agency, or a past bankruptcy can still receive a dispensary registration certificate. However, ADHS may use these factors as criteria in the selection of who will be allocated a dispensary registration certificate if there is more than one qualified applicant for a given CHAA.

20: How will competing dispensary applications be evaluated?

ADHS will evaluate competing applications with the criteria by the order listed in the rules.

21:How do I show that I have $150,000 in startup capital?

An applicant needs to submit proof that the entity or a principal officer of the entity has $150,000 (one hundred fifty thousand dollars) in an in-state or out-ofstate financial institution. The documentation must be dated within 30 days before the application and show that the entity or principal officer had control of the monies for at least 30 days before the application was submitted. (See question DI49, DI50, DI51 below for details)

22: Can a dispensary operate in one CHAA and have its cultivation site in another CHAA?

Yes, a dispensary can operate in one CHAA and have its cultivation site in another CHAA. However, the dispensary must operate in the CHAA for which the dispensary registration certificate was issued.

23: Can a dispensary change the location of the dispensary?

Within the first three years after receiving a dispensary registry certificate, a dispensary may move; the new location must also be within the CHAA for which the dispensary registration certificate was issued. After the first three years, a dispensary may move to a location in another CHAA. In either case, a dispensary must comply with A.A.C. R9-17-307 to change the dispensary’s location. The fee for a change of location is $2500.

24: Is a dispensary in a rural area of Arizona required to remain in the CHAA for which the dispensary registration certificate was issued?

A dispensary in a rural CHAA must remain in the CHAA for which the dispensary registration certificate was issued for the first three years. After the first three years, a dispensary in a rural CHAA may move to a location in another CHAA but it must prove the new site complies with local zoning requirements and pay the associated fee.

25: If I’m awarded a dispensary registration certificate, can I start operating right away?

Dispensaries that have a dispensary registration certificate must apply for approval to operate at least 60 days before the expiration of the dispensary registration certificate and receive approval to operate before the dispensary registration certificate expires. A dispensary may not begin operations until the Department inspects the facility and issues an Operating License.

26: What happens if I obtain a dispensary registration certificate and am not able to complete construction and begin operations before my dispensary registration certificate expires?

A person with a dispensary registration certificate who applies to the Department for approval to operate the dispensary less than 60 days before the expiration date of the dispensary registration certificate, or does not apply before the expiration of the certificate, may be permanently disqualified from applying again.

27: Is a dispensary registration certificate transferable?

A dispensary cannot transfer or assign the dispensary registration certificate.

28: How will dispensary registration certificates be awarded in future years?

Beginning in May 2012, ADHS will evaluate the number of operating dispensaries and the number allowed by statute. The department will follow specific rules if there are available dispensary licenses.

29: How should a dispensary obtain its original stock?

According to the Arizona Medical Marijuana Act, a dispensary can acquire marijuana from other registered nonprofit dispensaries or from a registered qualifying patient or designated caregiver if the patient or caregiver is not compensated for the marijuana.

31: Is there a limit to how much medical marijuana a dispensary can have or grow?

Neither the Arizona Medical Marijuana Act nor the Department’s rules limit the amount of medical marijuana a dispensary may have or grow. However, a dispensary may want to consult with an attorney about Federal marijuana related laws and regulations.

32: If I don’t want to have a cultivation site as part of my dispensary, can I buy medical marijuana from another dispensary?

Yes, a dispensary must follow certain rules for acquiring medical marijuana from another dispensary.

33: Do I have to say where my cultivation site will be when I apply for a dispensary?

No, an applicant can add a cultivation site when submitting an application for approval to operate. After the initial dispensary registration certificate is issued, a dispensary may add a cultivation site (up to one per dispensary) or change a cultivation site’s location at any point during the process. There is a fee for changing or adding a cultivation site to a dispensary’s registration certificate.

34: What methods will a dispensary have to use to prevent unauthorized distribution of marijuana?

35: How will medical marijuana be transported from where it is grown to the dispensary or from the dispensary to qualifying patients who cannot drive?

A dispensary transporting medical marijuana to other dispensaries or to qualifying patients must follow certain rules, including using a vehicle with no medical marijuana identification and no visible marijuana or paraphernalia. Before transporting the marijuana, a dispensary agent must complete a trip plan containing a description of what is being transported and the anticipated route. While transporting marijuana, the dispensary agent must carry a copy of the trip plan and have a means of communicating with the dispensary. After completing the trip, the dispensary agent is required to enter the end time of the trip and any changes to the trip plan. If medical marijuana is delivered to a qualifying patient, the dispensary agent also has to comply with requirements for verification and record keeping.

36: What services must a dispensary provide? What services may a dispensary provide?

A dispensary is required to be open and available to dispense marijuana to qualifying patients and designated caregivers at least 30 hours per week. The dispensary is also required to provide educational materials for qualifying patients or designated caregivers and to have materials available for the assessment of the therapeutic or palliative use of marijuana for the qualifying patient’s debilitating medical condition.In addition, a dispensary may cultivate marijuana for the dispensary’s inventory or to sell to other dispensaries; transport medical marijuana and related paraphernalia; prepare, sell, or dispense marijuana-infused edible food products; prepare, sell, or dispense marijuana-infused non-edible products; sell or provide marijuana paraphernalia or other supplies related to the administration of marijuana to qualifying patients and designated caregivers; deliver medical marijuana to qualifying patients; or provide other patient support and related services to qualifying patients.

37:Can a dispensary sell candy and brownies that have marijuana in them?

Dispensaries must follow several rules to sell edible food products infused with marijuana.

A dispensary may obtain edible food products containing marijuana in two ways: it can obtain them from another dispensary or prepare the edible food products itself, following applicable food and drink requirements.

Yes, a dispensary has to employ or contract with an Arizona physician to be the medical director for the dispensary. A medical director may not provide a written certification for medical marijuana to a qualifying patient.

44: Can someone who is a physician become a medical director if he/she holds an Arizona medical license but also has a medical license and works in another state?

The requirements for a medical director include that the medical director must be an Arizona-licensed physician who is on-site or able to be contacted.

45: What will a dispensary’s medical director do?
The duties of a dispensary’s medical director include developing information and training for dispensary agents and customers. A medical director is not permitted by the rules to provide written certifications for medical marijuana.

46: What security will a dispensary have to provide?

A dispensary is required to comply with the specific security requirements. These include having security equipment to deter unauthorized entrance to limited access areas, exterior lighting, and video surveillance cameras. A dispensary must also have policies and procedures in place for the use of the security equipment to prevent unauthorized access to medical marijuana at the dispensary.

47: How much will it cost to apply for a registry identification card or a dispensary registration certificate?

The fees are listed in rules and include:

♦$150 for an initial or a renewal registry identification card for a qualifying patient. Some qualifying patients may be eligible to pay $75 for initial and renewal cards if they currently participate in the Supplemental Nutrition Assistance Program.

♦$200 for an initial or a renewal registry identification card for a designated caregiver.

♦$500 for an initial or a renewal registry identification card for a dispensary agent.

♦$5,000 for an initial dispensary registration certificate.

♦$1,000 for a renewal dispensary registration certificate.

♦$2,500 to change the location of a dispensary or cultivation facility.

♦$10 to amend, change, or replace a registry identification card.

48: When a CHAA location differs between the Arizona Department of Health Services’ map and a particular city’s CHAA map, which is correct?

A.R.S. § 6-101 defines an “in-state financial institution” as a state or federal bank, savings bank, savings and loan association or holding company with its home office located in this state.

50: What is an “out-of-state financial institution”?

A.R.S. § 6-101 defines an “out-of-state financial institution” as a state or federal bank, savings bank, savings and loan association or holding company with its home office in a state other than this state.

51: What type of documentation should I submit to prove that I have $150,000 in
startup capital?

Documentation may include:

♦A monthly bank statement issued by the bank that includes the name of the in-state or out-of-state financial institution, the name of the account holder, the account number, and the amount of money deposited in the account.

♦A letter on the in-state or out-of-state financial institution’s letterhead stating the name of the account holder, the account number, the amount of money deposited, and a statement attesting to how long the money has been in the account.

52: I did not receive a registration certificate for a nonprofit medical marijuana dispensary in the Payson CHAA. Can I see the business plan for the applicant that was awarded a registration certificate in the Payson CHAA?

The Department cannot provide you with the business plan submitted by an applicant. The Arizona Medical Marijuana Act, A.R.S. § 36-2810 (A.), states that information received and records kept by the Department for the purposes of administering the Act, including “[a]pplications or renewals, their contents and supportinginformation submitted by or on behalf of nonprofit medical marijuana dispensaries,” are confidential.

53: Can I get a list of the dispensaries?

Unless you are a registered qualifying patient who is not authorized to cultivate marijuana plants for medical use, the Department cannot provide you with a list of dispensaries. The Arizona Medical Marijuana Act, A.R.S. § 36-2810 (A.), states that information received and records kept by the Department for the purposes of administering the Act, including “the physical
addresses of nonprofit medical marijuana dispensaries,” are confidential. However, A.R.S. § 36-2804.04(C) requires the Department to provide a list of registered dispensaries to a qualifying patient who is not authorized to cultivate marijuana plants when issuing the qualifying patient‟s registry identification card.